WAEC Economics Past Questions & Answers - Page 96

476.

Price fluctuation is a feature of

A.

Common market

B.

Imperfect market

C.

Supermarkets

D.

Market failure

Correct answer is B

Price fluctuation refers to the frequents rise and fall of commodity prices in the market as a result of changes in the market situations. price fluctuation can be seasonal whereby prices of commodities changes during certain season of the year due to the increase in supply and demand. It is a feature of imperfect market where buyers and sellers can influence prices and production.

477.

If a commodity has a high marginal utility, its market price will be

A.

Stable

B.

High

C.

Zero

D.

Constant

Correct answer is C

The price a consumer is willing to pay for a good depends on his marginal utility, which declines with each additional unit of consumption.  The price decreases for a normal good when consumption increases. A good with a high marginal utility will have a zero market price. For example,water has a higher MU than gold, but gold cost more than water. The higher the utility, the lower the price.

478.

Physical productivity is affected by all the under listed factors except the

A.

State of technology

B.

Quantity of inputs

C.

Quality of inputs

D.

Price of output

Correct answer is D

The amount of products a firm would manufacture does not depend on the price of the output. The price of the output is the rate at which the firm will exchange the product in the market. It does not affect the physical production.

479.

When the marginal product is negative, the total product will be

A.

Constant

B.

At a maximum

C.

Increasing

D.

Decreasing

Correct answer is D

When marginal product is at zero, total product is at maximum and when Marginal Product is negative(-) Total Product is decreasing.

480.

All rates of interest in a country are influenced by the

A.

Bank rate

B.

Population growth rate

C.

Wage rate

D.

Mortgage rate

Correct answer is A

A bank rate is the interest rate at which a nation's central bank lends money to domestic banks, often in the form of very short-term loans. Interest rates charged by money lenders and financial institutions are influenced by the official bank rates. Banks are prohibited from setting their own interest rates.